ECB: Deposit rate to be cut by 10bp – ABN Amro

FXStreet Team FXStreet

Strategists at ABN Amro remain of the view that the ECB will announce a stimulus package at its meeting this week as the eurozone looks to be heading for a recession.

Key quotes

“We think that the ECB will cut its deposit rate by 10bp, increase net asset purchases to EUR 40 bn (from 20bn currently) and loosen conditions on its TLTRO programme.”

“We think on balance it will reduce the TLTRO rate by 20bp, compared to the 10bp drop in the deposit rate. Reducing the TLTRO rate could be a more effective way of easing bank lending conditions than reductions in the deposit rate.”

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